Tag Archives: advancement

Chancery Applies Corporate Advancement Case Law to LLC Context

A recent Delaware Court of Chancery decision interpreted the advancement provisions of an LLC Agreement by applying case law interpreting DGCL Section 145 in the corporate context.  In Freeman Family LLC v. Park Avenue Landing LLC, C.A. No. 2018-0683-TMR (Del. Ch. Apr. 30, 2019), the court reviewed the applicability of “defined phrases” that are familiar … Continue Reading

Advancement for Counterclaims Granted Despite Withdraw of Covered Claim

A recent transcript ruling by the Delaware Court of Chancery in Gasgarth v. TVP Investments, LLC, C.A. No. 2018-0621-JTL, transcript ruling (Del. Ch. Dec. 7, 2018), explained that the right to advancement was not extinguished by an amendment of a counterclaim to specifically withdraw breaches of fiduciary duty counterclaims and remove factual allegations relating to … Continue Reading

Chancery Applies Fitracks Procedures to Challenged Advancement Award

Last month, in a comprehensive advancement decision captioned White v. Curo Texas Holdings, LLC, C.A. No. 12369-VCL (Del. Ch. Feb. 21, 2017), the Delaware Court of Chancery applied what has become known in Delaware as the “Fitracks Procedures” to determine the appropriate amount of an advancement award when the exact amount of fees for covered … Continue Reading

Chancery Issues Additional Advancement and Indemnification Rulings in Quiznos Restructuring

An Eckert Seamans associate prepared this overview. The Court of Chancery issued two opinions relating to a web of advancement and indemnification claims brought on behalf of multiple, separate plaintiffs: (1) Meyers v. Quiz-Dia LLC, C.A. No. 9878-VCL (Del. Ch. Jan. 9, 2017); and (2) Meyers v. Quiz-Dia LLC, C.A. No. 9878-VCL (Del. Ch. Jan. … Continue Reading

Chancery Denies Claim For Advancement and Indemnification From Successor Entity

Grace v. Ashbridge LLC, C.A. No. 8348-VCN (Del. Ch. Dec. 31, 2013). Issue Addressed:  Whether a successor entity was liable for advancement and indemnification claims based on the operating agreement of a successor entity LLC even though the sole allegations involve a predecessor entity and a related entity. Short Answer:  No. Brief Overview:  An understanding … Continue Reading

Chancery Denies Advancement Claim

Emerging Growth Fund, L.P. v. Figlus, C.A. No. 7936-VCP (Del. Ch. Mar. 28, 2013). This Chancery opinion denies a claim for advancement which was made as part of and in the context of a motion for a preliminary injunction to enforce the terms of the parties’ partnership agreement. Applying basic contract interpretation principles, the court found that the … Continue Reading

Chancery Addresses Default Fiduciary Duties in LLC and Advancement Issues

Zimmerman v. Crothall, C.A. No. 6001-VCP (Del. Ch. Jan. 31, 2013) Issue Presented  This 74-page opinion addresses the allegations of a minority unitholder in an LLC who asserts claims that the directors breached their fiduciary duties in connection with several financing transactions. Brief Overview  Zimmerman claimed that the challenged transactions should be analyzed under the … Continue Reading

Key Delaware Corporate and Commercial Decisions in First 4 Months of 2012

The following key Delaware corporate and commercial decisions from the first four months of 2012 are a follow-up to our summary of the key decisions that we featured from 2011. We highlight on these pages all the corporate and commercial opinions from Delaware’s Supreme Court and Court of Chancery, and we have chosen the following 2012 rulings … Continue Reading

ABA Panel Presentation on D&O Liability, Advancement and Indemnification

Kevin F. Brady and Francis G.X. Pileggi were part of a panel presentation entitled:  “Protecting the Corporate Director” at the American Bar Association’s Business Law Section Spring Meeting at Caesars Palace in Las Vegas last month.  The focus of the panel was on director and officer liability, as well as indemnification and advancement, including insurance … Continue Reading

Court Awards Fees for Advancement and Indemnification and Establishes Protocol for Future Advancement Requests

The Court of Chancery in Danenberg v. Fitracks, C.A. No. 6454-VCL (Mar. 5, 2012), addressed important issues of advancement and indemnification. After the parties met and conferred but failed to reach any agreement as to amounts, the Court on March 5, 2012, awarded $292,019.91 to petitioner Noam Danenberg as advancement from respondent Fitracks, Inc. in connection with his … Continue Reading

Indemnification and Advancement Issue of First Impression Decided by Chancery

Hermelin v. K-V Pharmaceutical Company, C.A. No. 6936-VCG (Del. Ch., Feb. 7, 2012). Issues Addressed The Court of Chancery addressed an issue of first impression in Delaware regarding: “what evidence is relevant to an inquiry into whether an indemnitee acted in good faith for the purposes of permissive indemnification” under DGCL §§145(a) and (b). The Court also addressed: (1) Whether … Continue Reading

Chancery Court Modifies Advancement Award Based on Changed Circumstances

Duthie v. CorSolutions Medical, Inc., et al., No. 3048-VCN (Del. Ch., June 16, 2009), read opinion here.  A prior Chancery Court decision in this advancement case, which also provides more background facts,  has been summarized on this blog here.   Overview This Chancery Court decision discusses in detail the conceptual and public policy basis for an important aspect … Continue Reading

Chancery Court Denies Full Amount of Advancement Request

Underbrink v. Warrior Energy Servs. Corp., (Del Ch., Feb. 24, 2009). A prior ruling is this case can be found at the following citation: Underbrink v. Warrior Energy Servs. Corp., 2008 WL 2262316 (Del. Ch., May 30, 2008)(“Memo Opinion”). That prior opinion addressed the validity of a bylaw amendment that retroactively granted advancement rights. (As an … Continue Reading

Chancery Examines Reasonableness of Fees Awarded

In Lillis v. AT & T Corp., (Del. Ch., Feb. 25,  2009), read letter decision here,  the Chancery Court reviewed a dispute about the reasonableness of fees that were awarded in an advancement claim as well as related litigation. There have been several Delaware opinions involving these parties in this long running case, which have been highlighted here. I … Continue Reading

When “Indemnification” Also Refers to “Advancement”

 Sodano v. American Stock Exchange LLC, 2008 WL 2738583 (Del. Ch., July 15, 2008), read opinion here.   This Chancery Court decision interprets corporate documents and a settlement agreement to determine rights to advancement of legal fees. The court observes that the word “indemnification” as used by the parties in the relevant documents in this case … Continue Reading

“Fees on Fees” Limited By Proportionality in Advancement Matter; and Chancery Confirms that Advancement Rights May Be Terminated

In Schoon v. Troy Corp., (Del. Ch., March 28, 2008), read opinion here, the Delaware Chancery Court granted advancement rights to one of the plaintiffs, but denied it to the other, based primarily on the wording of the relevant bylaws as construed through the applicable statute and case law. Moreover, although "fees on fees" are … Continue Reading